WORCESTER, Mass., April 2, 2013 (GLOBE NEWSWIRE) -- World Energy Solutions, Inc. (Nasdaq:XWES) today announced that its Board of Directors, based on the recommendation of the Audit Committee and in consultation with management and the Company's independent registered public accounting firm, Marcum LLP, has concluded it will restate its previously issued audited financial statements for the year ended December 31, 2011 included in the Company's Annual Report on Form 10-K, and its unaudited financial statements for the quarterly periods ended March 31, 2012, June 30, 2012, and September 30, 2012 included in the Company's Quarterly Reports on Form 10-Q and the unaudited pro forma disclosures included in its Form 8-K/A filed on December 17, 2012 (the "Relevant Periods"). Accordingly, investors should no longer rely upon the Company's previously released financial statements for the Relevant Periods and other financial data released related to the Relevant Periods.
The Company has concluded that the timing of revenue recognition for certain commission payments was recorded incorrectly during the Relevant Periods. This incorrect treatment related to the Company's revenue recognition policy for its mid-market product line, an area the Company entered with its acquisition of GSE Consulting on October 31, 2011. Under its accounting policies in effect at the time, the Company recognized revenue from up-front commission payments as cash was received from the energy supplier, beginning with the quarter ended December 31, 2011. As a result of its review, the Company has determined that it was required to record these revenues upon contract completion, or earlier to the extent actual energy usage data is received from the energy supplier or can be reliably estimated.
At this time, the Company believes that the adjustments necessary to make these amendments to the Relevant Periods will have no effect on previously reported cash and cash equivalents or cash flow from operations. The estimated impact of the restatements for the Relevant Periods is expected to decrease revenue and net income by approximately $0.6 million for the year ended December 31, 2011 and approximately $3.1 million through the first nine months of 2012. The Company expects to recognize these amounts of revenue and net income in subsequent periods.
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